Flip or Flop? How to be certain your fixer upper home is a profitable one

by Golden Bear Realty on
Thursday, January 26th, 2017

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The Palm Beach Gardens real estate market is once again on the upswing; consequently, many buyers are looking for a fixer-upper home to make their own. Often, buyers who intentionally set out to purchase a fixer-upper are either planning to make a dollar by flipping the house or are planning to design a permanent home their family can enjoy. Either way, maintaining equity in the home is important in case life plans change. Oleg Sulyma of Golden Bear Realty has extensive experience in buying and selling fixer-upper homes in West Palm Beach, Jupiter, and Palm Beach Gardens. Having success from the flips and learning from the flops, he offers these five tips to keep in mind before purchasing and renovating a fixer-upper home in Palm Beach Gardens, Jupiter, Tequesta or North Palm Beach:

1. Negotiate a good deal on the property. Since the home is not in tip top condition, the sale price should be lower than homes with a similar square footage in the neighborhood. “If your plans are to flip the house for profit, then it is important to do your research and know the current value of comparable homes in the neighborhood,” advises Oleg. “This way, you can negotiate a lower sale price with the understanding that additional monies will be needed for renovations.” If you are unable to negotiate a fair deal, then be ready to walk away. “The last thing you want to do is be upside down on a house,” cautions Oleg. Of course, if you are keeping the home for a personal residence, then paying market value or slightly above is not unreasonable. “I always tell my clients that you can’t put a price tag on the memories you’ll make in your home. So, if the home is in your desired neighborhood and fits within your budget, just go for it. Otherwise, you might regret letting it slip away,” adds Golden Bear Realty agent Sharon Gisriel, who specializes in Jupiter Abacoa real estate.

2. Get your own home inspection and mold assessment. Using a reputable home inspector as well as separate environmental mold assessors reduces the likelihood of surprises during the remediation and build-out phases. For example, if the home previously had a water leak, invisible mold could live behind the sheetrock. Conducting your own home and mold inspection will indicate unforeseen beforehand. As such, you can itemize all the required work and determine a price point for each task. Oleg recommends Shawn Presto of Presto Home Inspections and Gary Rose of Integrity Mold Inspectors.

3. Consult with a general contractor. Even if you plan to renovate the home yourself, Oleg suggests consulting with a contractor who can provide general design ideas and help you navigate modern home plans. Additionally, the contractor can provide you with a step-by-step process sheet so that you will know what order to complete each task. For example, if you are resurfacing the floors, you will want to have the paint crew come beforehand so your new floors will be protected. A contractor can also advise you on time frames for each task and when to schedule. “Recently, a friend of mine renovated a home, and he decided to order the window blinds last. Well, when he finally ordered, the company told him it would be 6-8 weeks before the plantation blinds would be ready! This delayed his ability to quickly put the home on the market and cost him extra money,” explains Oleg. Hiring an interior designer is another way to ensure the home renovations are atheistically pleasing and feature home improvements in line with current trends. “People mistakenly associate interior designers with an incredulous price tag,” says Golden Bear broker Todd Vance, “but often interior designers can save homeowners money because they are able to purchase merchandise at a discounted rate.” Many furniture stores such as Ethan Allen in Palm Beach Gardens and Pottery Barn at the Gardens Mall offer complimentary design services for customers.

4. Over-budget your construction cost. Familiarize yourself with the cost of materials you will install and create a budget that indicates the price of each time as well as labor and delivery expenses. “Be sure to have money for unexpected repairs,” cautions Oleg. “I recommend 10-15% above your estimated budget.” This way, you’ll be ready for any hidden surprises or additions you may decide to include down the pipeline.

5. Have a trusted group of subcontractors. If you are overseeing the renovations and seeking assistance from subcontractors, find a reliable network and visit previous projects they’ve completed. Create a detailed itinerary for them to follow and be certain each worker understands his or her task. Be available for questions and concerns. “This is probably not the best time to take a vacation,” laughs Oleg.

6. Familiarize yourself with building codes. Building codes and mandatory inspections differ slightly from Palm Beach Gardens, North Palm Beach, and Jupiter. Contact the town administration and determine what type of inspections and permits are required prior to the renovations. This will also help you with the scheduling process and reduce the waiting period before the real estate is listed for sale.

7. List the home with a real estate specialist. Once your fixer upper home is a luxury home for sale, list the property with a Golden Bear Realty professional who specializes in that community. “With appropriate marketing and an accurate price tag, your newly reconstructed real estate will have you flipping like Simone Biles,” promises a smiling Oleg. Check out one of Oleg's recent fixer uppers below. For more information about buying, renovating, or selling a fixer upper, contact Oleg Sulyma at 561-721-2626.